Annual Report 2017 | Page 35

The Farm Credit Foundations Plan Sponsor and Trust Committees provide oversight of the benefit plans . These governance committees are comprised of elected or appointed representatives ( senior leadership and / or Board of Director members ) from the participating organizations . The Plan Sponsor is responsible for employer decisions regarding all benefit plans including retirement benefits . These decisions could include plan design changes , vendor changes , determination of employer subsidies ( if any ), and termination of specific benefit plans . Any action to change or terminate the retirement plan can only occur at the direction of the AgriBank District participating employers . The Trust Committee is responsible for fiduciary and plan administrative functions .

Pension Plan : Certain employees participate in the AgriBank District Retirement Plan , a District-wide multi-employer defined benefit retirement plan . The Department of Labor has determined the plan to be a governmental plan ; therefore , the plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974 , as amended ( ERISA ). As the plan is not subject to ERISA , the plan ’ s benefits are not insured by the Pension Benefit Guaranty Corporation . Accordingly , the amount of accumulated benefits that participants would receive in the event of the plan ’ s termination is contingent on the sufficiency of the plan ’ s net assets to provide benefits at that time . This plan is noncontributory and covers certain eligible District employees . The assets , liabilities , and costs of the plan are not segregated by participating entities . As such , plan assets are available for any of the participating employers ’ retirees at any point in time . Additionally , if a participating employer stops contributing to the plan , the unfunded obligations of the plan may be borne by the remaining participating employers . Further , if we choose to stop participating in the plan , we may be required to pay an amount based on the underfunded status of the plan . Because of the nature of the plan , any individual employer is not able to unilaterally change the provisions of the plan . If an employee transfers to another employer within the same plan , the employee benefits under the plan transfer . Benefits are based on salary and years of service . There is no collective bargaining agreement in place as part of this plan .

The unfunded liability reflects the net of the fair value of the plan assets and the projected benefit obligation at the date of these Consolidated Financial Statements . The projected benefit obligation is the actuarial present value of all benefits attributed by the pension benefit formula to employee service rendered prior to the measurement date based on assumed future compensation levels . The accumulated benefit obligation is the actuarial present value of the benefits attributed to employee service rendered before the measurement date and based on current employee service and compensation . The funding status is subject to many variables including performance of plan assets and interest rate levels . Therefore , changes in assumptions could significantly affect these estimates .

Costs are determined for each individual employer based on costs directly related to their current employees as well as an allocation of the remaining costs based proportionately on the estimated projected liability of the employer under this plan . We recognize our proportional share of expense and contribute a proportional share of funding . Our allocated share of plan expenses is included in “ Salaries and employee benefits ” in the Consolidated Statements of Income .

Benefits paid to participants in the District were $ 103.7 million in 2017 . While the plan is a governmental plan and is not subject to minimum funding requirements , the employers contribute amounts necessary on an actuarial basis to provide the plan with sufficient assets to meet the benefits to be paid to participants . The amount of the total District employer contributions expected to be paid into the pension plan during 2018 is $ 90.0 million . Our allocated share of these pension contributions is expected to be $ 4.8 million . The amount ultimately to be contributed and the amount ultimately recognized as expense as well as the timing of those contributions and expenses , are subject to many variables including performance of plan assets and interest rate levels . These variables could result in actual contributions and expenses being greater than or less than the amounts reflected in the District financial statements .

Nonqualified Retirement Plan : We also participate in the District-wide nonqualified defined benefit Pension Restoration Plan . This plan restores retirement benefits to certain highly compensated eligible employees that would have been provided under the qualified plan if such benefits were not above certain Internal Revenue Code limits .

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